As More Companies File for Bankruptcy, Their Employees Struggle to Follow Suit
Chances are, if you’re like most people, filing for bankruptcy feels like a sort of personal failure. But it shouldn’t. Right now, hundreds of companies that have lost business due to the coronavirus are filing for Chapter 11, and in some extreme cases, Chapter 7. This leaves their employees without work and struggling with the moral dilemma of discharging their debts so that they don’t have to pay them. Why so many Americans hold themselves to a higher standard than their employers has much to do with our pride.
Yet bankruptcy actually exists to protect the economy, and right now, millions of Americans find themselves out of work. While some of these folks have been able to apply for unemployment or forgivable PPE loans for 1099 work, others are struggling with the loss of income.
Will Government Safety Nets Keep Everyone Afloat?
The short answer is no. Even those who are collecting unemployment right now may not have a job waiting for them in a post-COVID economy. Shutdowns have crippled several industries including entertainment, hospitality, and retail.
Retail specifically will struggle to emerge from the pandemic as the industry was struggling due to online sales already. Many individuals who worked in malls or on the floor of stores may not see their jobs return to them when the government benefits run out. In other words, these folks are safe for the short-term, but their future is unknown. Once those benefits dry up, what will they do?
In other cases, moratoriums on loan payments aren’t as far-reaching as many believe. Right now, millions of Americans are behind on mortgage payments, rent, and utilities. Lenders and landlords are prohibited from foreclosing or evicting these residents, but all the money that they don’t pay during this period will need to be paid in full once the moratorium expires. That means that millions of Americans could be scrambling to find new residences in the coming months. Moving is expensive.
What are My Options?
Those with outstanding mortgage or car payments are encouraged to contact their creditors. Their creditors still have the final say as to whether they will be willing to renegotiate the loan contract if they fall behind. While mortgage lenders can’t make any moves right now, auto lenders and others can. This includes repossessing your vehicle.
At present, those in dire financial straits are encouraged to make as much use of the government benefits as they can. Bankruptcy can be an option for those who are forced out of their homes, are behind on utilities, and just need a fresh financial start so that they can move forward.
Contact a West Palm Beach Bankruptcy Attorney
It helps to discuss matters with a bankruptcy attorney even if you have no intention of filing for bankruptcy. While financial planners can give you sound advice, bankruptcy attorneys can help protect you from lawsuits and protect your assets from liquidation. Call the West Palm Beach bankruptcy attorneys at Bruce S. Rosenwater & Associates today to learn more about our services.